3. The costs of buying

Crunching the numbers is an essential part of buying a home, and with so much information now available online, it's not as hard as it sounds to do your sums.

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Your property could be repossessed if you don't keep up your mortgage repayments.

Are you sure you want to buy? It could prove an expensive move unless you've really thought it through. Here we help you weigh up some of the pros and cons.

There's no right or wrong answer, it really depends on you, the stage of life you're at and the state of your finances. Here are some of the big issues to consider when deciding between renting or buying a property with a mortgage.

  When you buy When you rent
Freedom You're free to enjoy your home as you wish. Renovate, decorate and furnish it your way. Get a pet. Do up the garden. But a mortgage is also a long-term commitment that can tie you down. You can move relatively easily if your job, relationship or life changes. Plus maintenance is your landlord's problem.
Security A 25-year mortgage is a very different prospect to a 6 month rental contract. You have to be sure you can keep up the repayments. But with commitment comes security. Pay your way and you could have a home for life. Freedom is great but other than your latest contract you have no security. A landlord could simply refuse to extend the contract and you'd need to find somewhere else to live.
Investment A home may cost a lot, but it could be worth a lot too. In 25 years you may have paid off the mortgage and own a valuable asset. That said, there are no guarantees. You could lose money if house prices fall, and first you need to raise a large deposit. If you rent you may not need to worry about decoration, furnishings, solicitors, surveys and Stamp Duty. On the other hand, rent is money you will never get back. Work out how much rent you would pay over a lifetime and buying might be a price worth paying.

Comparing your outgoings to your income and seeing what you have left over is an essential next step. You might be surprised by what it shows you.

Working out your monthly income should be relatively easy, though self-employed people might find it harder to predict. As well as your salary, remember to add any benefits, gifts from family, interest from savings or any bonuses you are sure you'll get.

Your outgoings are harder, but start with predictable things like utility bills, insurance, council tax, phone contracts, regular travel costs, loan and credit card repayments. Subtracting these from your income should tell you how much money you have spare after you've met your obligations. Remember, if you're currently renting, you won't be paying rent any more. That should go a long way towards mortgage repayments.

Then think about the variables, such as food, clothing, shopping, presents, entertainment and going out. Look back over your bank statements over the last six months. You might be shocked at how much you actually spend.

You might find it's time to economise. Could switching utility or other service providers save you money? Which debts could you pay off? Which monthly expenses could you cut back on? Be realistic. We all have to live and a treat now and then keeps us all going. But some economies might be worth making if they get you the home you want.

It's also important to budget for a payment buffer in case of price rises or other unforeseen costs. If you apply for a mortgage the lender should undertake a detailed analysis of your income and outgoings to check that, in their view, you will be able to pay the monthly repayments as they fall due. They should also check that you would still be able to make the repayments in the event of a change in interest rates.

Use our calculator to work out your monthly incoming and outgoings, how much you could borrow and what you might expect to pay for a mortgage each month.

Spending some quality time looking through your bank statements will help you be realistic about your monthly spending. The following calculator is a good starting point to help you get in the right frame of mind. However, this list might not cover everything and you might have specific things not on this list too. During an application with a lender you will go through a more detailed analysis of your income and outgoings to check that, in their view, you will be able to pay the monthly mortgage repayments as they fall due.

Your monthly income:

Your monthly expenses:




How much can you borrow?

Once you've done a budget and know your income and outgoings, Leeds Building Society can give you an indication of how much you might be able to borrow. It's not a promise to lend, but it does give you an idea of what kind of property you might be able to afford.

Let's find out

How much might you pay?

When you know how much you could borrow, you can then look at the Leeds Building Society range of mortgages to see how much they might cost you. Again, it's not a promise to lend, but it does tell you how much you might expect to pay each month.

Let's find out

There are a number of other one-off costs that you will have to budget for when buying a home which can add up to thousands of pounds, so don't leave yourself short by leaving them out.

Fees and costs vary by lender, value of property and mortgage size. You may not have to pay all of the fees listed below.

Cost What it covers Things to remember
Mortgage application fee Some lenders charge an upfront mortgage booking fee (or equivalent) usually to reserve funds on a fixed or capped rate product. These fees vary between lenders and may not be refundable if the mortgage application falls through. Check this before you proceed. Leeds Building Society does not charge an upfront mortgage booking fee.
Mortgage product fee Some mortgage products have an upfront fee, which some lenders call an arrangement fee. This may be in addition to a separate booking fee. These fees may vary depending on the lender and interest rate charged. This can be added to your mortgage amount but you will have to pay interest on the amount if you decide to do this. You should find out if the fees are refundable if you do not complete your purchase. Leeds Building Society typically charges between £199 and £999 for mortgage product arrangement fees depending on the mortgage which are refundable should the mortgage not complete.
Valuation fee The fee charged by a surveyor to value the property to check it's worth the mortgage amount. This can vary depending on the value of the property. With some mortgages the lender will pay this for you. Leeds Building Society's valuations cost between £230 and £1400.
Mortgage account fee A single fee may be charged by a lender when you take out your mortgage to cover set up, maintenance and closing down costs. This is separate to the arrangement fee and varies from lender to lender. Leeds Building Society does not charge a mortgage account fee.
Higher lending charge A lender may charge a fee to account for the higher risks involved in high loan to value (LTV) lending and may take out insurance cover as protection in case you can't pay back your loan and they have to sell your house at a loss. The lender can still chase you for the shortfall. This may depend on how much you borrow and will vary between lenders, and how much you're contributing as a deposit.
Local authority searches Fees for searches with the local authority to check whether there are any planning or local issues that might affect the property's value amongst other things. These searches are usually done by your solicitor or a conveyancer. These can vary between local authorities. You should ask your solicitor for further details.
Legal costs Paid to a solicitor or conveyancer to carry out the legal work involved in buying/selling property. Buyers and sellers will both need a solicitor or a conveyancer . These vary depending on your solicitor – remember to budget for VAT on top of the price quoted.
Stamp Duty A type of tax paid by the buyer – the amount you pay is based on the purchase price. This is a percentage of the property cost depending on its value. MoneyHelper have a useful stamp duty calculator on their website.
Survey Paid by the buyer to a surveyor to check for structural defects and general condition of the property. There are different types of survey that vary in cost. The type of survey is usually the buyer's choice although a mortgage lender may insist on a particular type.
Moving costs Paid to a removal firm to move, and sometimes also pack, your possessions. This will vary depending on which removal firm you choose.
Transfer fee Paid to a lender for transferring the mortgage money to your solicitor. This cost can vary between lenders. Leeds Building Society charges £35 on the completion of your mortgage.
Mortgage exit fee Paid to the lender if you want to pay off your mortgage before the end of a deal. For instance, you pay off a three year fixed rate mortgage before the three years are up. These fees vary widely according to the lender and the deal in question. They can be higher in the early years of a deal and can run into several thousands of pounds. Check the details carefully before agreeing to any mortgage, so you know what you may be obliged to pay before you can get out of a deal early.

A valuation is designed to assure your lender that the property is worth the amount you are paying for it and a secure asset.

You might also want to get a more detailed survey for your own reassurance. Some surveys on the market include:

A Home Buyer's Report
This checks the condition of the property and its value.

  • Usually for properties of reasonable condition up to 150 years old.
  • Checks for major (not minor) faults.
  • Estimates the value of the property.

Structural Survey
This is a comprehensive, detailed survey, also known as a 'building survey'.

  • Usually for older, unusual or listed buildings or properties that have extensions or renovations.
  • Checks all parts of the property for faults (major and minor) and if any further reports are needed.